Lafayette Public Utilities Authority



Lafayette Public Utilities Authority, “the LPUA”


I. Power

 

In 1896, a majority of the City of Lafayette's population petitioned its mayor and city council to call an election for the purpose of creating a municipally-owned utilities system as a governmental business enterprise within of the City of Lafayette's government for water and electrical services.  The Lafayette Utilities Department was then created and governed by the legislative body of the City of Lafayette until consolidation of the City and the Parish of Lafayette.  The Lafayette Utilities System (LUS) has continued as a department of the City of Lafayette, now also providing wastewater treatment and fiber-to-the-home communication services.

Through the voter-authorized City-Parish Charter in 1992, the Lafayette Public Utilities Authority, the LPUA, was created to be the governing authority for the Lafayette Utilities Department by the Lafayette City-Parish Consolidated Government's Home Rule Charter.   The LPUA is unique:  it is neither a board nor commission created by the Council, nor are its members appointed by the Council; its members are elected to the Council by the voters. 

 

The Lafayette Public Utilities Authority, the LPUA, according to the Charter, is made up of the members of the City-Parish Council whose Council districts include sixty percent (60%) or more of persons residing within the boundaries of the City of Lafayette.    Currently those City-Parish Council districts with 60% or more of City of Lafayette residents are five:  Districts 3, 4, 6, 7, and 8.  These five Council members make up the LPUA. 

 

Qualifications to be a member of the City-Parish Council, include being elected from and being residents of their district for at least six months before qualifying for office and throughout their term of office.  They must also be at least 18 years of age and a qualified voter of the district each member represents.  They serve a four-year term of office, with a term limit of three successive terms.


Although the City-Parish President appoints the Director of the Lafayette Utilities System, it is the LPUA which approves that appointment.  According to the Charter, the LPUA also shall fix rates, incur indebtedness, approve the utility budget, and approve proposals for the improvement and extension of the utilities.  It may enter into contracts with governmental bodies outside the City-Parish Government, such as the smaller municipalities in Lafayette Parish, and can contract with private utilities.  The LPUA first reviews and approves the proposed annual budget for the Lafayette Utilities System before it is accepted for presentation and approval to the City-Parish Council. 

 

 

The Professional Service Review Committee reviews all contracts for professional services across LCG’s departments, including LUS.  Professional services for LCG do not require bidding.  The LPUA approves other bids for LUS as many of its agenda items.

Additionally, the "appropriate courts" are the body of appeal for setting rates by the LPUA, rather than the full Council, according to the Charter.  The LPUA does not have its own set of policies, but rather follows those of the Lafayette Utilities System.

However, at the request of the bond attorney, the full Council's approval for bonds to be issued by the Lafayette Utilities Department has been required.   The bond attorney has stated the bonding rate would be negatively affected if the full finances of the City-Parish Consolidated Government were not backing the bonds. 

 

The Louisiana Public Service Commission is not the policy making body for Lafayette Utilities System.  Policy for the Utility is made by the Lafayette Public

Utility Authority. 


LUS Fiber, the City of Lafayette’s telecommunication government enterprise, is a separate entity of the Lafayette Utilities System. It must meet telecommunications regulations of the Louisiana Public Service Commission.  The bond issue to initially fund construction and installation of Fiber-to-the-Home services to residents and businesses of the City of Lafayette and the public schools in the parish was passed by the voters of the City of Lafayette in 2005. That debt is being paid down by the LUS Fiber.  It is the first municipal Fiber-To-the-Home project in the state of Louisiana and one of the largest in the United States.


Conflicting Language within the Charter of Lafayette Consolidated Government

According to the City-Parish attorney, there is conflicting, "murky" language within the Charter on the legislative body of the Parish.  At one point the Council and the LPUA actually met jointly, but now meet separately.  It has been traditional practice since consolidation of the City of Lafayette and the parish that the Council ratifies most LPUA's decisions and proposed ordinances in keeping with the attorney’s concerns regarding ambiguities in the Charter in particular as it relates to Bonds and Finance authority.   

However, in January, 2015, for the first time since consolidation an LPUA's vote was then revoked by a majority of the Council.   Council members representing areas largely outside the City of Lafayette, do have a smaller percentage of residents in their districts living within the City of Lafayette who receive services of the Lafayette Utilities System.  These Council members have pointed out such residents do not have representation on the LPUA.

 

II. Services


The LPUA provides oversight of the City of Lafayette's Utilities System for its services: electricity, water, wastewater, and its latest division, fiber optics telecommunication, which includes, broadband internet, telephone, and video.

The LPUA meets at least twice per month, one hour before the Council meetings the same evening.  The LPUA selects its chair and vice-chair from its member board at the first meeting of each calendar year.   Meetings are open to the public and the meeting agenda is available on the Council's website.  The Lafayette Utilities System's Director provides reports to the Lafayette Public Utilities Authority and presents proposals, projects, capital items, policy updates and changes and any ordinances for adoption, to the LPUA for its discussion and approval.  

The LPUA was minimally involved in the Integrated Resource Planning (IRP) Study, completed in 2011 to assist in planning long-term energy resource strategies for the Lafayette Utilities system.  The study was completed under contract with a private firm.   The LPUA and the Council invite public feedback to LUS initiatives, such as the integrated resource planning process.

III. Funding

A.  Funding for the LPUA


There is no budget for the Lafayette Public Utilities Authority itself.  The five Councilmen serving the LPUA do not receive additional remuneration.

B.  Funding for the Lafayette Utilities System and Its Communication System

The Lafayette Utilities System's and its latest division, Communications System (LUS Fiber) are separated in accounting as two governmental business enterprises. 

 

The budget for the Lafayette Utilities System is included in the Lafayette City-Parish' annual budget, and includes a five-year capital improvements budget, as well.

In the 2015-2016 proposed budget, LUS utilities sales make up $236,006,333, or 38% of the $620.9 million total revenues of Lafayette Consolidated Government.  Included in these LUS revenues is $22,600 million which is then paid, as an LUS expenditure, into the City of Lafayette’s General Fund revenues as the ILOT or “in lieu of taxes.

ILOT is a feature found in LUS bond covenants, and in the bond covenants of many other municipal electric utilities. The concept is for the utility to make a payment to the government for the use of public rights-of-ways and to roughly cover other fees/taxes that would typically be made if a private utility provider served Lafayette.

Sources:

Home Rule Charter, Lafayette City-Parish Consolidated Government, 1992

Website of Lafayette Utility System, lus.org

Website of Fiber-to-the-Home, www.lusfiber.com

Website of the Louisiana Public Service Commission, www.lpsc.louisiana.gov

Individual interviews with members of the Lafayette Public Utilities Authority, 2014

Review of information by Don Bertrand, Chair of the Lafayette Public Utilities Authority and Councilman for District 7, September, 2015

Review of information by Terry Huval, Director, Lafayette Utilities System, October, 2015.

Email response from Lorrie Toups, Chief Financial Officer, Lafayette Consolidated Government, October, 10, 2015.

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